nanog mailing list archives
Re: best effort has economic problems
From: "Stephen Sprunk" <stephen () sprunk org>
Date: Sun, 30 May 2004 13:40:00 -0500
Thus spake "Gordon Cook" <cook () cookreport com>
The point I am making in my report is NOT that the best effort network has technology problems but rather that it has ECONOMIC PROBLEMS. That it might support 2 or 3 players not 2 or 3 HUNDRED. That until companies begin to go chapter seven and vanish, the best effort net will be a black hole that burns up capital because, for many players, the OPERATIONAL expense is more than they get for bandwidth never mind cap-ex. best effort won't go away. many best effort players will. for the time being, best effort bandwidth prices as an absolute commodity cannot sustain networks over the long haul. A network that can deliver QoS the report hypothesizes may be able to attract enough revenue to become profitable. How to to this my group is still discussing. We don't pretend that QoS is easy or any kind of mature collection of technologies, but increasingly it looks as though the industry, if it is ever going to be self sustaining, really needs to look at QoS services and solutions.
This problem has little to do with BE vs. QoS. It's a temporary market imbalance caused by providers willing to sell service for less than cost; in the absence of external factors, eventually enough providers will go under for prices to rise back above cost. Possible external factors mainly consist of providers finding other add-on services sufficiently profitable to offset losses from basic transport. QoS is one possible add-on, but I haven't seen any convincing evidence customers would buy it today if it were available. There are many other services that providers could offer on top of the basic transport that could have the same effect without the substantial technical and economic challenges that QoS presents. This adds up to a market where it's possible for IP transport (BE or otherwise) to be unprofitable yet exist indefinitely. S Stephen Sprunk "Stupid people surround themselves with smart CCIE #3723 people. Smart people surround themselves with K5SSS smart people who disagree with them." --Aaron Sorkin
Current thread:
- Re: best effort has economic problems, (continued)
- Re: best effort has economic problems Mikael Abrahamsson (May 29)
- Re: best effort has economic problems Eric Kuhnke (May 29)
- Re: best effort has economic problems Mikael Abrahamsson (May 29)
- Cable networks RE: best effort has economic problems, maybe OT Christopher J. Wolff (May 30)
- Re: Cable networks RE: best effort has economic problems, maybe OT Petri Helenius (May 30)
- Re: Cable networks RE: best effort has economic problems, maybe OT Stephen Sprunk (May 30)
- Re: best effort has economic problems Eric Kuhnke (May 29)
- Re: best effort has economic problems Mikael Abrahamsson (May 29)
- Re: best effort has economic problems Simon Leinen (May 31)
- Re: best effort has economic problems Mikael Abrahamsson (May 31)
- Re: best effort has economic problems Vicky Rode (May 29)
- Re: best effort has economic problems Mikael Abrahamsson (May 30)
- RE: best effort has economic problems Neil J. McRae (May 31)
- Re: best effort has economic problems Laurence F. Sheldon, Jr. (May 31)